Here is a simple and concise interpretation
of how to trade with CCI. It comes from Fitzy, across the pond in Australia.
These charts come by courtesy of Steve Fitzsimmons, Fitzy40.

If you have comments or
questions for Fitzy and how he trades CCI you can go there. You can also find
Fitzy trading at night on Paltalk.

Fitzy gives great advise when he
says "It
does not work for everyone. Trades are taken at your own risk. The examples
included have been chosen to show the set-ups. Set-ups donít always work. They
are a guide only."

This is always the case with valid trading
methods.

I personally do use CCI on one
of my screens that I trade from. The most important factor is screen time. Learning
the nuances of a setup/indicator will allow you to become a consistent
profitable trader. Six variations of using CCI are presented here by Fitzy. If
you master just one you can be consistently profitable. My advise is to do exactly
that. Master one setup, then add another setup or another indicator to tweak the
setup.

Trading the CCI with examples
by FITZY

The following is a list of
set-ups and my
interpretation of them. It is up to individual traders to make a workable
trading plan from them.

Example 1.The CCI that is used is a
standard 14 period (black). There is also the turbo CCI that is a 6
period CCI (red) overlaid on top of the 14 period CCI.

This list is not the holy grail but it is somewhere for new traders to the CCI
to begin. The set-ups can be used with either 14CCI or turbo CCI or a
combination of both. The CCI can be traded a number of different ways such as:

These set-ups can be used on any time frames. Others can be used depending on your trading style.

Example 2 back
to indexThe trend on the CCI is
determined by the zero line. If you have more than 5-6 bars above zero the trend
is up and vice versa for down.

I will now explain the
set-ups and my interpretation of them:-

Example 3
back to index
1) Regular divergence set-ups use 3 Ė 10 bars. The trigger is when the 14 CCI
crosses the 100 line. The divergence must occur above or below the 100 lines on
the indicator and the best ones occur at an extreme reading of 200 or more.
Remember these set-ups are against the trend.

3) Trendline breaks occur on the
CCI indicator not on the price. The best ones have well defined peaks and
valleys and the more touches of a trendline the stronger they are. They should
always start from outside the 100 lines. My favorite ones are with the trend.
Others with high win % are when they occur at the zero line.

Example 6
back to index4) Zero line rejections
occur when the CCI comes up to or goes down to the zero line then hooks and goes
back in its original direction. These are best with the trend.

Example 7
back to index5) The slingshot pattern is
when the 14 period CCI rejects the zero line and the turbo CCI hooks at around
the 100 line. Trigger is the hook of the CCI.

Example 8
back to index6) Extreme trades occur over
the 200 lines. The win % on these trades is not as high as others and filters
can be used depending on your trading style.

There are other set-ups as
well and this is a document in progress. All comments are welcome.

Lots of traders have trouble with exits. There are a number of ways to exit
using the CCI, some of these include:-